Private banks offer P200B to fund agri-agra projects
Credit to Author: EIREENE JAIREE GOMEZ| Date: Wed, 13 Feb 2019 17:08:07 +0000
Private banks have offered P200 billion in funds to the agricultural sector to comply with the Agri-Agra law, a Cabinet official said.
Enacted in 2009, Republic Act 10000 or the Agri-Agra Law mandates banks to allocate at least 25 percent of their outstanding portfolio to agriculture. Of this, 10 percent should be devoted for credit for agrarian reform beneficiaries.
Agriculture Secretary Emmanuel Piñol identified the banks as Metrobank, Bank of the Philippine Islands, East West Bank, Sterling Bank of Asia, Development Bank of the Philippines and members of the Chamber of Thriftbanks.
Piñol said the banks expressed willingness to fund the department’s agricultural and agrarian projects, which aim to boost the country’s agricultural productivity.
He noted that since the enactment of the law, compliance had been very low and banks were forced to pay penalties. This time, however, Piñol said the banks committed to fully support the department’s projects.
He said the banks were “also open to funding projects which would be certified by the government as Agri-Agra law compliant.”
“It was agreed that DA-ACPC (Department of Agriculture-Agricultural Credit Policy Council) will submit to the bankers’ group a list of Agri-Agra law compliant projects which could be considered for funding,” Piñol added.
Piñol said compliance of banks with the Agri-Agri law was low because the “government failed to guide them on what projects to fund.” Banner projects of the DA include solar-powered irrigation systems, farm mechanization, and completion of farm-to-market road network, he added.
Meanwhile, loans released by the DA-ACPC reached P1.64 billion since its launch in June 2017, benefitting some 33,150 marginal and small farmers and fishers.
The ACPC said its Production Loan Easy Access (PLEA) program has reached about 10 percent or 45 of the 455 unbanked municipalities identified by the Bangko Sentral ng Pilipinas.
The credit facility offers non-collateralized loans at 6 percent annually or 0.5 percent per month with free crop insurance from the Philippine Crop Insurance Corporation and with flexible repayment schedule and convenient loan maturity.
“Through the PLEA, farmers and fishers in previously unbanked and unserved areas in CAR, Region I, Region IV-A & IV-B, Region VI, Region VII, Region IX, Region X, Region XII and Region XIII now have access to affordable loans for their agri-fishery production,” the ACPC said.
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